28 April 2006

Apple Market Cap Ahead of Dell Again

While the big financial IT story of today is Microsoft's loss of $30bn in value (equal to one half of an Apple or a Dell), Apple has crept up and has again as of this moment (slightly before close) exceeded Dell's market cap at around $60bn. It managed this feat earlier in the year before dropping quite significantly from a high of $86.

This time seems to be a combination of Dell's recent disappointing marketshare losses, and perhaps recent comments by Steve about not being interested in a bigger role at Disney and about Apple's great products coming soon.

While again this may be a temporary phenomenon, I think we'll see the two companies trading close together for a longer period than last time.

25 April 2006

La methode Francaise

I have always enjoyed meeting French people, but French politics I just do not get.

I blogged a few weeks ago about how Chirac just doesn't get it. And here he is again from today's FT (subscription required):

French president Jacques Chirac will on Tuesday seek to shore up his political legacy with the reinvigoration of Franco-German industrial policy spearheaded by the launch of a €1.7bn ($2.1bn, £1.2bn) series of innovative grand projets – including the creation of a multimedia search engine to rival Google.

To my French friends: Do you really, really think this sort of thing is a good use of your tax euros?

To Google investors: Better short Google, this is obviously the end of the line.

24 April 2006

Further proof of competition argument

No sooner had I posted the articles on Apple and Microsoft no longer competing than I came across this story reported at TGDaily today.

Essentially, Microsoft attorneys in front of the EU's Court of First Instance used the success of iTunes to argue that competition for it does exist.

Now, you may argue that blows away my argument that they're not competing. But I believe it just confirms my thoughts - that Apple's success is beneficial to Microsoft in allowing it to argue to be free of restrictions being placed on it in terms of what it can do in the marketplace. As Apple's success now only tangentially affects Microsoft (and barely, if at all, revenue-wise), it is going to milk these opportunities as much as it can to boost it's ability to compete against those it really needs to be fighting.

Incidentally, I think their claims are a bit disingenuous. Windows Media still has the largest marketshare of any of the players, despite iTunes/Quicktime success. And Apple succeeded in this not because of Microsoft restrictions but because they took their eye off the ball and missed this (iPod) market completely. The other primary competitor in this area - Real Networks - has already, of course, taken close to $1bn of Redmond's money in settlement (no blame admitted!) of claims. What is ludicrous of course is that because this has taken so long to sort out, technology has started to make the argument even more obscure and show how ineffectual the EU has been in achieving meaningful actions.

Blogger.com problems

Apologies to anyone whose had a problem accessing these posts lately. I've been unable to post on blogger.com for the last day or so, and so has every other user too! That's a pretty serious problem and there are many upset users over on the forum. Posting now is very, very slow and intermittent with many error messages (which indicates an entry hasn't posted when it has)

Of course, it's a free tool, so do we have any rights to be upset? I don't really know, but I think it's a warning sign for Google (blogger.com owner). This is not the first problem, and notifications about the problems are very poor. Gmail has also suffered problems. I'm not sure Google has yet come to terms with what is expected of it (even if services are free) as it massively expands these services around the world.

Apple and Microsoft Competition Conclusions

In the last two posts I've argued why Apple no longer strategically views Microsoft as the key competitor or even a major competitor, and why indeed Microsoft welcomes a strong Apple.

I wanted to wrap up this series of posts with some other observations. If you buy into the arguments I've made about Apple and Microsoft not really competing, then there are other implications of this. For instance, it is clearer what Apple will NOT do. One key area that I'm constantly seeing hypothesised is that Apple will license OS X to other computer manufacturers. Given Vista's delays and paucity of features, lots of manufacturers (say they) would love to sell Mac OS X on their machines. And, I'm sure they might (though I wonder how much they would actively market it). But to think it's simple and profitable for Apple to do so is to misunderstand the difficulties of developing software. There are enough reports of problems of making Mac OS X work on Apple's own computers. Sure, we don't have the BSOD problems of Windows, but can you imagine the sorts of problems of people running Mac OS X on their 3 year old computer with a Brother printer, Lenovo scanner, Logitech webcam etc.? The average user would most likely have many problems - some of which would be down to their own hardware, but some down to lack of drivers, and others down to basically user error. Do we really think most users would be able to install OS X on their computers and be fully functional? What happens when they think Mac OS X has reduced their battery life on their laptop by 50%? Who gets the support calls? And, who gets the blame?

Some people think selling an OS for $150 is like printing $150 bills. Microsoft may have some internal problems, but I'm sure that a vast amount of its time and resources is to ensuring its software remains compatible with the massive installed base of legacy systems sold by the Wintel manufacturers. Apple's luxury is that it controls the hardware that its software runs on. Take away one of those controls and the game is completely different. MS makes 76% margin on its Client OS sales because it has truly awesome scale. Apple will never have that scale in the OS area.

Using the car analogy again I used in the previous post, if BMW really had a great fuel that its cars could use that was lots better, but that its cars were also compatible with the generic fuel too, would they sell the fuel to other car manufacturers? If Apple really believed they could sell 10x as many Mac OS X copies as it can Mac computers AND maintain a seriously healthy margin on such sales, then a strategy of selling Mac OS X to anyone might be a valid one to pursue. As it is, such a strategy would kill Apple as quickly as licensing clones almost did.

An alternative strategy that has been predicted by some (eg John Dvorak) is that Apple would just adopt MS Windows and give up on OS X. But while that accepts the argument that MS and Apple are no longer competitors it makes no sense either. Apple's formula is Hardware + Software = Competitive Advantage. How would it compete with Dell if it didn't have OS X? By great design alone? In my opinion, Apple has always had the best mousetrap. Unfortunately it meant you buying Apple's cheese on their terms. Now, you can still use Apple's mousetrap with Apple's cheese for the best effect, but if you prefer the cheese that you can get anywhere else that everyone else uses, then you can do that too.

So, the war of words will continue on both sides. There's been much comparing of Vista and Tiger/Leopard OSes, and debates about Apple/Quicktime/DRM/iTunes vs Microsoft/WMA formats. But at the strategy level, there is not so much competition as tacit acknowledgement that what is good for one is probably not bad for the other and vice versa. Apple AND Microsoft can both be successful, and indeed the success of one can in fact help the other to succeed in its primary objectives.

Why Microsoft really loves Apple

In the previous post, I argued that Apple is in essence no longer competing with Microsoft. But how does Microsoft see Apple? Do Bill and Steve wake up each day wondering how they're going to kick Cupertino's ass that day?

I took a look at their Microsoft's most recent filing on quarterly performance to get an idea about where MS makes its money.
Their revenues are reported broken out along the following lines:
Client (ie desktop OS): 29%
Server/tools (MS Server OS, SQLServer etc): 24.5%
Info Worker (ie. MS Office): 25%
MS Business Solutions: 2%
MSN: 5%
Mobile: 0.85%
Home and Entertainment (eg XBox): 13%

The most profitable parts are the Client and the Info worker parts of the business in which gross margins are greater than 70% (nice if you can get it!). But just who are Microsoft's biggest competitors, and where are the challenges? When you're in all those businesses, then in fact, you're competing with just about everyone. In servers/tools, it's people like Sun, IBM, Oracle. In the traditional core businesses of Client and Info Worker, the danger isn't from existing competitors which essentially have been marginalised, it's about facing up to the replacement of that business model by something else. The biggest challenges there are from open source which changes the landscape significantly, and from someone like Google - moving processing, software and data off the desktop to the internet for instance. Other challenges come from technologies such as virtualisation - and it's effect on licensing models.

In these mature business lines, the strategy is to defend the status quo of the current business model. This will hopefully (but not necessarily) come from innovation. In the other business lines, MS doesn't yet have a completely dominant position but is using its financial strength to muscle into these areas. It sees mobile as a key market as well as Home and Entertainment where the XBox is a key product for it. In services, MSN is it's primary offering, competing against people like AOL, Yahoo and of course Google. Where is Apple then on the Microsoft radar? I think if we're honest we can say it's not very visible at all. I'm sure MS will take every opportunity to take pot shots at OS X and the iPod for instance - but it is not worried about Apple taking over the OS crown because Apple is not trying to do that, and nor would it succeed. Yes, MS would like it's own music store (in conjunction with MTV), but it is only doing that after seeing how Apple has succeeded at creating this market and deciding it should not ignore it. And, in home entertainment, Apple could become a competitor too as convergence happens. But for now, MS has enough to do in that market fending off Sony and to a lesser extent, Nintendo.

So, while Apple fans like to think there's a David vs Goliath struggle going on, the reality is that David isn't going after Goliath, and Goliath has his hands full elsewhere. And, in fact, I think Goliath actually wants a bit of David's help too. Why do I say that? Well, look at the other challenges they face.

For every Linux computer sold, MS makes precisely zero. For every Mac sold, MS has a chance of selling an MS Office license. And, as of last week, it also has a chance of selling an XP (and later, Vista) license. Not only that, but Mac licenses are pretty profitable as they tend to be at higher prices due to retail purchases of the full product. I've never seen the statistics, but I'd take a bet that as many business Macs have a legal copy of MS Office as business PCs and that as many home Macs do too (in percentage terms). It has oft been stated that the Mac Business Unit at MS is one of the most profitable divisions. Every MacWorld Expo, there is always a presentation by the Senior VP of the Microsoft Mac Business Unit (Roz Ho, I think?) - and it's more than just a charade (incidentally, there's also a great blog entry doing the rounds from David Weiss, a member of the Mac BU giving a tour of the facilities at Redmond - these guys are REALLY committed to the Mac platform) So, MS can in fact make as much from a Mac as they can from a PC. Microsoft has the skills to develop Mac software, and it could in fact make more of its products available for Mac (eg Visio, Project etc). So, financially, MS has little to lose by Macs taking market share from it's traditional PC allies. And, if it had a choice between a Mac sale and a Linux sale, there is no doubt what it would prefer.

But I think MS needs Apple even more than this. I think that Apple has been a constant source of ideas for Redmond, and that it has benefited from taking those ideas in the past and will continue to do so in the future (sure Apple learns from Microsoft too, but I think one direction is more prevalent!). Whatever Apple does in the living room, MS will surely copy, refine and exploit. And, as Paul Thurrott notes in his recent article which I linked to last week, much of Vista is indeed a copy of what's best about Mac OS X Tiger. MS needs these ideas not to fight Apple but to fight Linux, and to fight Google. Apple's business model comes from the same vintage as MS - hardware sales with commercial software licenses etc. Apple's success in that way shows that model is still essentially valid. Cupertino is Redmond's R&D facility. It has used this very effectively in the past to profit at a level Apple could never achieve. It has (had?) cross-licensing agreements with Apple that allow it to use many of these technologies. It's own internal innovation has become crippled because of its own management failings, the need for constant legal overview (see below) and the sheer difficulty of supporting the vast numbers of platforms sold by it's partners.

But, there's even another level on which Microsoft needs Apple. It showed this when Apple was on the ropes and needed cash. It injected $150m and agreed to continue to develop MS Office for the platform. Sure, it has made money from the Mac BU as discussed above (and as it turned out, it made a lot of money when it cashed in that investment). But in my opinion that investment was always about Microsoft preferring a weak competitor around than no competitor at all. That's because, even back then, it knew it's biggest problems were not from it's (weak) competitors (esp Apple) but from the competition authorities. And today, that is an even bigger problem. Every product feature that MS would like to introduce is probably endlessly debated by lawyers internally as it will no doubt be challenged somewhere as anti-competitive. Add an MS version of iLife? There'll be some companies (eg Adobe) that will be upset by it and cry foul. For heaven's sake, they can't make the OS more secure without upsetting the antivirus and anti-spyware companies that make their living off MS' insecurities. But if Apple has 10% of the market for OS, wouldn't it be a lot easier for MS to argue that it needs to be free to innovate as that proves that the free market is working? The client OS is still a growing business, so this does not imply a loss of revenue - just a slowing down of that growth. The trade-off for Microsoft in its other areas of ambition is potentially huge.

That's why I think Microsoft would actually welcome Apple's success - at least for the next few years.

Read the final part of this series with what this means Apple will and won't do as a consequence of this strategy.

(Edited to add links between Articles)

Apple and Microsoft no longer really compete

I wrote in January that one of Apple's key challenges was to establish more partnerships with key companies, and observed how bad historically it had been at doing this. As I was considering some of the fall-out from the BootCamp announcement recently, it struck me that Apple has actually gone and done this. First it not only made peace with Intel, it made a strategic relationship that looks like it will be beneficial for both companies - Apple needed power (esp in laptop models) and got it, and Intel needed publicity for it's new products to fight back after being trounced by AMD. Of course, we knew about the Intel partnership before I wrote the January blog entry, but I've finally understood that the Intel relationship for Apple was not about performance per watt (though that was important) it was about burying once and for all the notion that it's raison d'ĂȘtre is to kill Microsoft. What Apple has done with the Intel switch is to turn not one but two very large and influential companies from being Apple foes into supporters. Am I going too far in describing Microsoft as a supporter? Perhaps, but bear with me.

Apple's position with PowerPC was always going to be as a small niche player with diminishing marketshare over time and the iPod "halo effect" was not going to turn this around except to provide temporary relief at best while the long term decline contiued. Yet for Apple to be a sustainable business it needs to have serious marketshare in the business it's in. What is that business? It's primarily hardware, and the primary competition is Dell, HP (at the PC end), Lenovo, Acer, Toshiba, Sony, Fujitsu, Gateway, etc. Apple fighting Microsoft doesn't help Apple's cause one bit. Neither did fighting x86. Steve Jobs has known this since before returning to Apple. In a Forbes interview in 1996, he said "The PC wars are over. Done. Microsoft won a long time ago.". Perhaps we didn't believe him, and perhaps that's not what the Mac faithful want to hear. The reality is that Apple is never going to displace Microsoft as the dominant OS. And fighting that battle (and the chip battle) only saps energy from the causes it needs. Apple is still fighting for long term survival in a cut-throat highly competitive business. It's resources must be focused on beating its direct competitors through a sustainable strategy. That strategy involves giving the end-user an unparalleled experience - simplicity, functionality, great design. It is sustainable because unlike most or all of it's competitors it is able to control the whole of that experience by virtue of having it's own OS and software. But it is sustainable in a mass market only if you are able to maintain a meaningful market share. I would suggest that the level of that marketshare for sustainability has to be among the top 5 suppliers, and possibly even in the top 3. That implies a global marketshare of >10%. Ignoring commercial markets (where it will have a harder time) and ignoring less-developed world markets, it will in fact need to have a marketshare in the consumer markets of the developed nations in the region of 15-25% if it is to be sustainable. The iPod halo effect for Apple will be about giving it enough revenue and profit headroom for a period of time to make the changes it needs to head towards this figure. Without this effect, Apple's current transition would have been impossible. It has but one chance left and it is taking it.

While Apple zealots (and a few MS ones too) like the constant talk of OS wars, the reality is that focusing on this was self-defeating (at least for Apple). Why have Microsoft against you when you can have them on your side? Sure, you can maintain a marketing war about which OS is better. It matters more to Apple perhaps that it gets more of the plaudits in this regard. We can even have a "battle" in the music player arena too - after all it seems easy to get Steve Ballmer wound up. But in the music market, it's never really been a battle of Apple vs Microsoft. Microsoft never saw this market appearing - Apple pretty much created it. Sure, Microsoft would now like a piece of it, though it doesn't stand to gain much as it doesn't have any (hardware) products. The biggest danger to Microsoft in the music arena comes from the possibility that Microsoft's standard - WMA - is toppled by Quicktime for dominant marketshare and makes Microsoft's plans for your living room more difficult to achieve. But even here, I think Apple has far more to lose by not getting a toehold than Microsoft has by not being the only choice. At this time, WMA is still dominant, though Quicktime is catching up (purely down to the iPod effect of course).

Even if you accept my argument that Apple has embraced Microsoft, you may argue that Microsoft will not embrace Apple and that will be a constant problem longer term for Apple. In a second post, I am going to look at Microsoft's competitive position and argue that in fact it's best interests are served by embracing Apple as well. I don't expect the war of (marketing) words to stop, nor the wars between the zealots on either side, but in terms of absolute strategy, Apple's success neither depends on Microsoft's destruction and nor does Microsoft's success depend on Apple failing.

In the meantime, Apple will be aiming to take small chunks of marketshare from the other major (and not so major) computer manufacturers. I would liken this scenario to the global car manufacturers. Currently Dell is Toyota, and Apple is perhaps (would like to be) BMW. Few would argue that BMW has a sustainable and profitable business (as does Toyota). Both companies can exist and be successful as long as a few of the others are failing or just middling along (GM, Ford, Fiat, even VW, etc). Unlike the car market which is pretty mature, the computer business is still growing at over 10% a year. So, there is plenty of opportunity for growth and profitability in this market for many companies.

Where Apple's strength now is that it, and only it, controls one aspect of the technology that it's competitors do not have - the OS. Back to the car market analogy (I know this isn't perfect, but it will make the point), there are perhaps 3 fundamental components of making a car work - the car itself, the engine powering it, and the fuel that is supplied. Let's consider the car design as the computer itself, the engine as the chip, and the OS as the "fuel". For a long time, Apple persisted in having it's own unique combination of these things - it's own designs, processors by Motorola/IBM and it's own fuel. The rest of the world had something else - x86, and Microsoft. Or perhaps Apple was driving on the left in a hydrogen-powered car, and everyone else on the right with petrol. The barriers to change for anyone were perceived as too high no matter how good the experience of driving on the left.

Apple has now overthrown that thinking. It now has the same engine type as everyone else, and it will let you use the same fuel if you like. But it has one ace that even BMW doesn't have. Only it's designs can run a different type of fuel that's a lot better than the one everyone else has. You can go faster and do better mileage with the Apple fuel. But if it runs out, if you can't get it, or you just plain want the other fuel, then that's fine too. And as long as Apple can make it's fuel better and better, while ensuring you can still use the fuel everyone else has, then their advantage can get stronger and stronger. So, it will ensure it's designs are the best they can be, and that it's OS is the best available. It will fight in a competitive market among other companies that it has the resources and ingenuity to beat. And it's success is much more in its own hands than it has been for the last 20 years or so. Success for Apple will be doubling in size, then tripling, while remaining decently profitable. It will be about moving from low down the order of computer manufacturers up into the top 5 and then into the top 3. As that market changes through convergence of devices in the home as well as for mobile devices, it will be about becoming THE leading consumer electronics company through providing devices that people want to use as they go about their daily work and play.

I don't see this as being very negative for Microsoft, and frankly if they dwelled on this competitive threat they would be missing the far more serious threats to their whole business coming from many other quarters (see subsequent post). Paul Taylor, technology correspondent for FT, wrote on Friday (subscription required):
"If, like me, you have quietly coveted an Apple Mac for years, but been put off by the lack of support for Microsoft Windows software, an answer may finally be at hand".
That's the type of view Apple wants people to have. I'm sorry if this seems obvious to you - a quick check of the more rabid mac news sites recently still shows that many seem to think that the overthrow of MS is still the critical success factor for Apple. That is never going to happen! While us Mac zealots may dream of such, we all know that Apple has no real chance of even moderate success in the business market - good design and iLife alone are not going to result in mass replacement of systems running various flavours of critical enterprise software. Don't get me wrong, there's a good part of the business market Apple would like and can indeed get. But that market is not in equipping a call centre with 1,000 machines, so it will be a niche player for the smaller enterprise and in situations where employees can pick their own machines. That is not going to lead to 20% marketshare let alone 50% - the only level at which you could really start to say that Apple has perhaps beaten Microsoft. Without a strategy that openly targets Microsoft as a competitor, Apple has the flexibility of using MS or at least being MS-agnostic to achieve it's aims.

The PC wars are over. Done. Microsoft won a long time ago. Move on.

My next entry will try to articulate why Microsoft is actually a willing accomplice to this strategy.

(Edited to add links between articles)

New Apple product(s) today?

I don't usually post such time sensitive stuff, but as I haven't seen it anywhere else, I'll go for the scoop!

As of this moment (12.30pm) the Apple stores are being updated which usually means some new Apple products. It's unusual to be a Monday, but it does time with the NAB show which is taking place this week and which Apple has used before to launch products.

Rumours have suggested a 17" MacBook Pro, which sounds a likely introduction for a pro-event like NAB. Perhaps it might be more.

We shall know soon enough I guess!

(Update: Well my scoop didn't make it to the wire, as Blogger.com has been down for 24 hours or so! The announcement was indeed the 17" MacBook Pro, and at a pretty good price/spec too)

20 April 2006

Important reading material...

Paul Thurrott, the technology writer, needs little introduction to Mac zealots, many of whom consider him a completely biased member of the dark side. I think for the most part Paul does an ok job of commenting on the Mac scene (iPods, Macs, OS X etc) given his strong background in the Windows community. He is not afraid to try Macs and iPods and not afraid to find he sometimes likes them! I disagree with a number of things he has written but if you are a Mac supporter, some of these things need to be listened to and understood if you hope to convert Windows users to "our cause".

But when commenting on Microsoft and Windows, which is what he does most of the time, Paul is generally a cheerleader for Redmond, tending to look optimistically at the future. With that in mind, it is quite amazing to read his latest article covering Windows Vista. I'll give you a clue as to what to expect - the title is "Where Vista Fails" and wraps up his in-depth series on the most recent Customer Preview.

I have been composing a lengthy piece on Microsoft which I hope to publish shortly. This article may well influence some of my thoughts on that subject. Mac fans: enjoy Paul's article. Windows fans: well, it's never too late to join the party!

19 April 2006

Why Apple Chose Intel

There was much whining last year when Apple announced the move to Intel chips. There were some who thought leaving the PowerPC platform was a bad, bad thing. Others who were astonished that Apple had chosen Intel and not AMD who seemed to have the upper hand on performance. What was all this stuff about performance per watt anyway?

Reading this review of the Core Duo at Techreport via this article at Ars Technica, it is now easier to see why they took the decision they did. You don't have to read the full report at Techreport - just a few choice pages on power usage and the conclusion for instance will be enough. As the article also points out, there is also enough evidence for Mac users to (part) justify Apple's motives for not moving sooner.

With Bootcamp and other developments on the OS front, it is clear that moving to x86 itself was not just about performance per watt - it is part of a much grander plan which is only just unfolding. But MacBooks based around Turion for instance wouldn't be anything to write home about right now.

Of course, the relationship with Intel was not just about performance or performance/watt, Intel also needed Apple - comparatively small though it was. So, I've no doubt the deal between both parties encompasses many more aspects other than chip supply, and that it is a win-win for both.

I've no doubt AMD will continue to innovate and push Intel hard, and by all accounts, they will have some technology advantages again come (late) 2007 with moves towards larger numbers of processor cores. And when that time comes, Apple may well choose to offer machines using AMD chips. But for where Apple needed to be now and the next 12-18 months, Core - and the Merom/Conroe/Woodcrest successors are the perfect ingredients for its ambitions.

13 April 2006

Anandtech reviews MacBook Pro

I have noted before about how well Anandtech does reviews. Anand himself does a really thorough job of looking at the MacBook Pro - as both a replacement for his G4 Powerbook and as a Windows laptop.

He starts the article with this quote:

When I first started using a PowerBook G4 over a year ago it quickly turned into the best experience I'd ever had with a notebook.

That's some comment coming from a site known for it's coverage of the non-Mac world. Indeed, Anand's conversion is as significant in many ways as that of Security Awareness blogger Winn Schwartau. Anand seems to have stuck with using a Mac since being converted more than 18 months ago and it is interesting how he has adapted to and, indeed, ended up preferring many of the Mac ways of doing things.

The review is a long one, but well worth reading.

Music Business Whining

Yesterday I was astonished to read in the Financial Times what could only be described as an appeal led by Ian Anderson of Jethro Tull fame for changes in UK and European law that would mean more money heading the way of such deserving people as Sir Cliff Richard, The Beatles, The Rolling Stones, Sir Elton John etc.

The article "Why we need equality on copyright" is available via subscription only, but I understand much of the argument can be found in other news places too.

Essentially, Mr Anderson is arguing that the 50 year rule for copyrights in the UK and Europe is manifestly unfair, and will stifle unearthing new talent (where have we heard that one before?).

I noticed that Anders Bylund at Ars Technica had picked up on this too, and aided as usual by some juicy reader discussions, collectively point out the many flaws with Mr Anderson's arguments.

There are many, many more deserving causes than this one (I would have thought Bono should stay out of it for his own credibility), and I hope our government(s) does not get blinded by some specious economic argument that this is in any sense a good idea.

More on Cycling...

Occasionally here, I will mention self-righteously about how we cyclists are an ignored lot in this land. I contrasted this with how things are in Amsterdam back in November (read the November archive).

There was a good article in the Guardian today by Matt Seaton about something insidious that could come into effect and put cyclists at a serious legal disadvantage when defending themselves against motorists who have caused an accident. It is something I was already aware of and indeed have written to my MP about. If you're at all interested in this subject do read Matt's article.

If you think we are complaining about nothing (or just want a laugh), then follow this link (which Matt provides in his article) to an amazing set of photos from the Warrington Cycle Campaign on unsuitable bicycle facilities. I particularly liked May 2005.

All quiet on the iPod front

It's been a bit dull in the music player world lately. A couple of stories perhaps pinpoint why.

Stephen Manes writing at Forbes last week had some excellent points to make about the relative success of both iTunes AND the iPod and how the competition was failing to hurt them.

Also, last week, Creative Technologies announced 1st quarter earnings that were truly bad. (Story from Reuters here). While I couldn't quite understand how lower flash memory prices had actually HURT their profitability, it seemed like they had lots of excuses for losing around $60m on revenues less than $230m. Assuming some of the other Creative businesses are still successful, it is quite amazing to work out what they are losing per music player sold.

So, I think a lot of the reason for the lull in coverage of this area is from those who have been negative towards the iPod phenomenon perhaps deciding to lay low for a while. I was quick to damn the Zen Vision M player announced last December in this post . At that time there had been positive articles in certain places suggesting that there was finally some real competition. I was so disappointed with the Guardian's coverage of it ((and a few other articles too) that I gave up reading the tech section there altogether as part of a NY resolution to focus my reading. Obviously, the consumers haven't agreed with what some of the press had to suggest.

John Gruber at Daring Fireball has noticed the same thing. In this piece he says

"One nice side effect of the continuing growth and success of Apple’s iPod / iTunes / iTMS platform is that we’re no longer subjected to moronic business and tech pundits proclaiming that Apple, despite its initial success, is “making the same mistake with the iPod that they made with the Macintosh in the 1980s.”

In this article, John also links to an article he wrote in 2004 explaining why Apple would not make the (Macintosh) mistake of 1984 with the iPod. Any journalist thinking of writing about the impending failure of the iPod would do well to read that article as well as so much is still relevant and the insights offered 2 years ago have clearly failed to be heeded.

Of course, no sooner had he written his recent piece than he spots an article by a San Francisco Chronicle writer on EXACTLY this subject. His rejection of this again is inspired classic Gruber commentary.

I've no doubt the lull is just that - a lull. They'll be back with their theories when something negative happens. Two obvious triggers for that will be a bad decision for Apple in the Apple Corp vs Apple Computer case and an earnings report showing a drop in iPod sales from the Christmas quarter. (This was always obvious - Apple basically revamped the line for the busiest time of the year, and the growth to 14million units was spectacular; If iPod sales are more than 30% up on the same quarter from a year ago, that should be considered good. But I will nevertheless await the first "iPod sales finally slow" headline.

10 April 2006

More Football Madness

Just occasionally on this blog I'll touch on a subject I know not a lot about but still have a passion for - football. Perhaps that's from being a Scouser!

Anyhow two stories today - both from the same club - demonstrate why football is increasingly disconnecting from the masses.

First is the Manchester United plan to increase season ticket prices by an AVERAGE of 12.5% next year. I wonder what the average fan thinks of that one? Coincidentally it happens at around the same time United are inreasing the capacity of their ground by a significant amount (over 10% I think).

On the same day, we're hearing of Wayne Rooney's gambling debts of £700,000. Not bad for someone who is not quite 20 years old yet (or maybe he's just that). Now, I like Wayne as a footballer - from the minute I saw him (as an admitted Evertonian) you could tell he could be truly special. But this is just crazy. Furthermore, it is another one of those things that actually is a negative to the England team which is increasingly dominated by individual issues and problems from the manager on down.

Of course, there are those who think this is just the free market at work. But IMHO, supporting football clubs is something you do for life based on a whole set of values. When that loyalty is exploited for money, and then furthermore, to see how that money is then stupidly spent, it is just insulting for the real fans. I hope the free market will indeed bite back. We need a much, much humbler football business in the UK and it is the big clubs that need to see that clearly if sanity and respect is to be restored.

BootCamp and why the Mac Faithful are waivering

While Apple’s stock price is currently up over 10% since it announced Boot Camp – allowing Intel-based Macs to boot either Mac OS X or Windows XP – there have been numerous rumblings from the Mac Faithful. Ars Technica Guest writer Chris Foresman sums up the reasoned arguments well in this posting.

And, basically for the Mac faithful, Boot Camp fails the WIIFM (What’s in it for me?) test. Heh, we’re already converted aren’t we? And, we’re all used to running machines that we reboot once in a blue moon. Maybe we would want to run a Windows app once in a while. But then probably we’d want the data somehow integrated into our Mac apps, and we don’t want to stop everything we’re doing. Virtualisation is the route we’d like to see (and not spend any more of our IT spend on supporting Redmond). Indeed, many fear this tactic will reduce the amount of development specifically directed to the Mac platform. In the end, Boot Camp could be a negative for us – not a neutral.

But there are some who worry more – the beginning of the end of Mac OS X for instance is their conclusion. Perhaps we can thank the infamous John Dvorak in a February column for planting the seeds of this idea.

I think the conspiracy theorists are wrong if they believe the Dvorak rumor. Sure Apple is about hardware, but its whole business model is predicated on vertical integration – the belief that controlling the hardware AND the software is the key to a better user experience. That was the original Mac philosophy – only abandoned when things got desperate by a useless management team, and quickly re-asserted when Steve returned to save the company. That is the iPod philosophy too. The clever part of course is knowing when to open up and how to open up while ensuring your prime directive of ensuring that the better user experience is preserved. Mac OS X is a (the?) fundamental component of that Apple Mac experience.

So, let’s return to the more reasoned arguments against Boot Camp. The reality is that Boot Camp is not for us of course – if we do want Windows, we want it differently thank you very much. Boot Camp (public beta release) is in fact for those people we’ve wanted to convert, but who can’t take that step because they still need the insurance policy that is Windows. They may need it for work rather than home. Or they may need it for a very specific application. Or it might be one family member who must have it. Or it might be for playing games. Apple have, at a stroke, taken away that objection to getting a Mac. They are betting that such people will, at least over time, migrate to using the Mac environment for most of their work (or at least their iLife). Some say Apple will be pleased if people just buy a Mac and run Windows. But I don’t think that’s the case at all – that is not a sustainable strategy and will lead to the Mac software marginalization that some fear. But, if Apple can just get 1% more Windows users around the world to buy a Mac (and ideally use it as a Mac), then that increases the Mac marketshare by around 40%. That can only be good for all Mac users – the faithful included. And that’s why we (the Faithful) should welcome it warmly.

France is stifling itself

I don't usually cover topics around politics and economics, but then we Brits tend to love any opportunity to take a dig at our gallic neighbours. So, here goes!

Today, President Chirac announced that the new youth employment law that has sparked widespread protests across France would be scrapped. This is yet another big mistake and shows that neither politicians nor the country itself are willing to grasp the problems it most certainly has. It is ironic that it is many of the people who objected most strongly who stood to gain the most - at least in the medium to long term.

There was an excellent article in the Guardian today by Ashley Seager that sums up many of the issues. I'll let you read that as it covers the situation far better than I could. This article also references one from the weekend in which it was suggested as many as 400,000 French might be living in the UK today. Unlike the Brits in France (a high number but more often older or even retired people) most of these are young people who have come here to make the most of their education. This is a serious indictment of the situation there.

Increasingly France resembles much that was bad about the UK 30 years ago. Certainly the number of public sector strikes seems to be very high - and air traffic control, transport workers etc have an effect on many people outside of France. It does not help France's case in the world at large - whether for inward investment or for tourism. I would not be surprised if it might even have caused one or two votes to go against it when selecting the 2012 Olympics - and as it turned out those votes were crucial.

But who is to blame? The people or the politicians? Well, perhaps you get what you deserve in a democracy. But I think this story from the BBC recently in which Chirac stormed out of an EU session when a French business leader had the audacity to address the summit in English, shows that there is failure of leadership at the top to convince a nation it needs to change.

Sure, French is a wonderful language, and much of French culture is incredibly rich and valuable to the world. But if you try to avoid change when the world is changing around you, your influence will decline and, worse, your economic performance will drop off relative to those around you who try to embrace the new. France is avoiding the hard choices it needs to be making. It is inward focused and losing it's influence on World politics.

Of course, we write (slightly) smugly from across the Channel. But the lesson also for us in the UK is that we cannot hide from globalisation either, and indeed we shouldn't, even if we could. I'm not sure that even here the lessons of 30 years ago have been permanently etched in our consciousness. It is easy to imagine a situation where the dreamy far left (whose interpretation of history remains completely warped) in an unholy alliance with those who believe the gospel according to the Daily Mail cause the same sclerotic behaviour. The lesson of what is happening in France is for electorates to realise that we must elect governments who have vision. Governments who will take difficult decisions because they see the consequences of taking them (or not taking them). And we must continue to root out corruption, nepotism and just plain stupidity to ensure those decisions are made only for the best of reasons. (On the latter point, it will be interesting to see whether the Italian electorate, voting at the moment, makes the right choice in that regard).

Mes amis Francais! RĂ©veillez-vous!

05 April 2006

How big is "Bootcamp"?

I was thinking as I returned from a lunchtime gym session how quiet it's been on the Apple front lately. Open the laptop up, refresh my RSS subscriptions and lo and behold this pops up!

Suddenly, Apple have legitimised what hackers where trying to do (and raising prize money to do) just a few weeks ago. In a way, of course, it's no surprise at all. What I think is important is how they've gone about this - including stating that it will be a component of 10.5 going forward.

Personally speaking it's not the solution I'm looking for. While I would like the opportunity to run a couple of Windows apps, I would ideally want to do this without resorting to rebooting and the whole effort of running and maintaining a second OS (heh, even one is difficult enough to keep current and functional!)

But I'm not sure Apple is after that market at all. Rather it now offers huge appeal to users who have waivered about switching. The decision is essentially de-risked. Try Mac OS X. If you don't like it, it doesn't matter. Or use Windows when at work, and Mac OS X when at home. Or, person 1 uses the machine for Windows and person 2 uses it for Mac OS X. The decision comes down purely to the value you put on Mac hardware next to the competition plus the "insurance" cost of buying a copy of Windows XP.

I'm not sure at this point it represents a threat to Microsoft, though there are things Apple could do if this is successful that would heap pressure on them. It must be more worrying for the higher end PC manufacturers - I'm thinking Lenovo, Dell, HP, Sony for instance who now have a serious bit of extra competition.

There'll be a few conspiracy theories around no doubt - those who believe it's a step towards the end of Mac OS X. But it's not at all. It's a step which cleverly allows Apple to let a much bigger audience see what they've seen with the iPod - namely that vertical integration of hardware and software can offer a much better package.

The stock is already up almost 7% today on this news alone. So, Wall Street certainly gets it!

03 April 2006

From your Arts Correspondent...

Those who know me will attest to my "heathen" approach to the Arts perhaps best characterised by my (only slightly sweeping) generalisation that "poetry is crap" from my early 80's period.

So, who else better to report on some Performance Art witnessed first hand on Saturday at the Tate Britain by Linder entitled "The Working Class Goes to Paradise"? The fact that the performance was on April 1st added to my suspiciousness.

To give you a feel for the atmosphere, the music (continuous) could best be described as like being at the front-row of a Hawkwind concert, with 3 parallel-universe Hawkwinds all playing at once. Being in the environment of the Tate Britain certainly enhanced the surrealness of this experience. The volume however was truly awesome, and it was an absolute necessity to wear earplugs for nearly all the 2 hours we were able to "participate". I understood that the wonderful Health and Safety people had been concerned about numbers of people beforehand (certainly not an issue). I wonder if they had actually HEARD the performance? But, strangely (perhaps), it was not unpleasant or dischordant, just excruciatingly loud.

But of course, the music is only part of the performance. As described in the Tate Britain link, "women performed movements drawn from 18th Century Shaker manuals". Now, I didn't know a whole lot about Shakers, but here I've saved you the small job of Googling with this little piece that is relevant. In fact, this link explained one part which was getting me confused - namely the arrival of a person who was obviously a woman (and I suspect is indeed Linder) but who had a main of hair protruding from the rear, a costume that had elements of medieval times as well as the Wild West (there were also several images of Clint Eastwood around, but don't ask me why), and a nice beard/moustache set. She had also (in another rumour I heard) fasted for 10 days before the performance. She then did a long period of touching of hands/heads etc on some of the other women, which included extensive and (I would guess, exhausting) shaking. It is now (reasonably) clear to me that Linder (if indeed it was she) was in fact portraying the Shaker character of Ann Lee who (according to the link I have provided you) had a revelation during a long imprisonment that she was the Second Coming of Christ.

Unfortunately, I had only my cameraphone with me, and the photos are particularly poor. So the best you will get from me to give you an idea of the ambience is the one included here at very low resolution.

So, the verdict? Well, it was actually strangely compelling. Of course, I understand about 1% of the significance of any aspect of the performance. I still do not really understand the Workers in Paradise title. I think it is possible to equate the Shaker movement with the working class struggle perhaps, but I can't quite reconcile paradise and a continuous Hawkwind concert, though I can think of a venue much lower down that might be more appropriate!

As an aside, you may be wondering how arts heathens such as myself get invites to such events. The link in this is our old friend Dr Bob who is unique in this world in having worked in the same employment as (my partner) Sue (while gaining his PhD) AND me (while at Tibco). Bob was official Scientist for the event and as such seemed to be responsible for recording the proceedings in a written form. I hope your hearing is still fully functional, Bob. And, perhaps you could let me know what your findings are?

The 21st Century Judiciary?

Perhaps 20 years ago, in an English courtroom one could imagine the following conversation:

Judge: Who or What are these "Beatles" that you are talking about?
Barrister: They are, I understand, a popular beat combo, m'lud.

So, it is with amusement and pleasure that I read of the following proceedings in the Apple vs Apple case (from Associated Press via CNN):

The case is being heard by Edward Mann, a computer-literate judge who has acknowledged owning an iPod music player.

At one point Thursday he stopped Grabiner during the lawyer's explanation of Apple Computer's iLife software suite.

"ILife is not a complete novelty to me. I've got it and I use it," the judge said.

Grabiner apologized for explaining the obvious, but said that should the case go to a higher court, an older judge might not be so savvy.

Not just a computer-using and iPod-using judge, but one who uses a computer with a market share of 2-3%? A sign of the times indeed. I wonder whose music is on his iPod?